OBJECTIVES: CANA, an SGLT2 inhibitor, is a recently approved oral antihyperglycemic agent (AHA) for the treatment of adults with T2DM. As the prevalence and cost of T2DM continue to rise, payers seek treatment options to improve care and reduce cost.  Budget impact analysis may help payers in the formulary decision-making process.  To estimate the three-year budget impact of adding CANA to a hypothetical health plan formulary in place of other branded AHAs. METHODS: The model was developed from the perspective of a US health plan with 1 million members.  The prevalence of people diagnosed and treated with T2DM is based on US epidemiology statistics.  Drug costs were estimated using August 2013 wholesale acquisition costs. Publically available estimates of 2012 market shares  of the branded AHAs and estimated 2013, 2014, and 2015 market shares of CANA for Years 1-3 (Year 1: 0.3%, Year 2: 1.8%, Year 3: 2.1%)  were used.  The base case analysis examined an increasing CANA market share with a proportional decrease in the market share of the other branded drugs.  Results are presented as the difference in pharmacy budget, overall and per-member per-month (PMPM).  RESULTS: Prior to the introduction of CANA, the estimated pharmacy budget for branded non-insulin AHAs in this hypothetical plan was almost $48 MM/year.  With CANA added to the formulary, the budget is forecasted to decrease by $71,902 at Year 1, $431,409 at Year 2, and $503,311 at Year 3.  The PMPM expenditures decrease from $4.00 when CANA was unavailable to $3.95 at Year 3 of CANA uptake. CONCLUSIONS: The results show the positive budget impact of adding CANA to the formulary.  As payers continually face rising healthcare costs, an AHA that can safely and effectively treat T2DM and lower pharmacy costs would be considered highly valuable.